Intel reportedly puts plans for India plant on hold

BANGALORE, India  Intel Corp. has decided to put off its plans to have an assembly test facility in India, as the Indian government has declined to grant the company the various concessions it had asked for, according to a report in Business Standard Monday (Sept. 12).

"The company conveyed to the government last week that it would not be able to make the investment as the project would not be viable without the tax concessions. The company, however, said it would explore opportunities in the future," the report quoted a government official as stating.

To put up the $700 million facility in India, Intel (Santa Clara, Calif.) had sought incentives, including unlimited access to external commercial borrowings, tax exemptions and an upfront payment of $100 million (from the government), the report said. The concessions Intel requested were in addition to concessions companies would receive for locating in demarcated special economic zones.

The Indian government felt that conceding to Intel's demands would set a precedent for other companies to ask for similar concessions, the report said. In addition, Intel’s scale of proposed activities did not warrant receiving the concessions it asked for. The proposed facility did not add sufficient value so no further concessions could be obtained, the official was quoted as saying in the report.